The Blackstone Group L.P. (NYSE: BX) has reported earnings this morning, and the initial response is lower. The private equity giant posted a GAAP net loss of $246.7 million after items, and its "economic net income" was also a loss at -$93.6 million.
The company said that its total net reportable segment revenues were $32.3 million, driven down by declines in all business segments from $1.23 billion in 2007. Its GAAP revenues were $68.5 million.
Corporate Private Equity had negative first quarter revenues; Real Estate revenues down 94%; Marketable Alternative Asset Management down 81%; Financial Advisory Revenues decreased 24%
You can look through the entire release, but as the company noted, most business segments were indeed lower.
Interestingly enough, the company now has $113.53 billion in assets under management. It has also decided to make a dividend payment of $0.30.
Shares of Blackstone are down about 4% at $18.70 in pre-market trading.
The Blackstone Group LP (NYSE: BX) is planning to launch Blackstone Altius Advisors, a business focusing on event-driven investments in the Asia Pacific region and led by Aaron Nieman. The business will be based in Hong Kong and additional team members will operate from New York and Tokyo.
Aaron Nieman, Atius' Senior Managing Director and Chief Investment Officer, joins Blackstone after significant experience at S.A.C. Capital Management's Asia Pacific merger arbitrage division and at Lehman's Brothers Tokyo and Asia Pacific Global Trading Strategies Division. Also joining the team as Chief Operating Officer is Christopher Pesce. He has experience as Bank of America's Global Head of Prime Brokerage and with Goldman Sachs in New York and Hong Kong.
Blackstone Altius Advisors joins Blackstone Capital Partners and Blackstone Real Estate Partners, as well as a hedge fund and two closed-end mutual funds in Blackstone's Asia operations.
Shares of Blackstone were up a marginal $0.04 at $19.01 in early market trading, and now shares are down marginally by $0.05 at $18.92.
In late February, Corporate Express rejected Staples' bid for $10.63 per share. Today is the Dutch market regulator deadline to register an official bid. This morning, Staples upped its price by 10% to $12.53 per share for a total value of $2.26 billion. The offer is a 51% premium to Corporate Express' share price the day before the initial offer.
It seems that this sweetened offer may at least get Corporate Express interested in negotiating at this point. This time, Corporate Express has issued a statement that they are willing to negotiate and review the offer.
Corporate Express provides wholesale office supplies and printing and graphic services and an acquisition will increase the margins for Staples' overseas retail operations-a much needed boost in light of recent sales declines in the U.S.
Shares of Staples are up $0.30 at $22.26 in early morning trading. The 52-week range is $19.69 to $26.00. They plan to release earnings May 20.
Corporate Express is also trading up at $0.30 at $12.50 on relatively high trading volume. The 52-week range is $5.20 to $15.45. The market cap sits at about $2.29 billion.
Right after the close, Hewlett-Packard Co. (NYSE: HPQ) did actually confirm in a press release that the company was in advanced acquisition talks with IT-sourcing giant Electronic Data Systems Corporation (NYSE: EDS). While it noted that there are no assurances that a deal will be reached, Wall Street took it in good stride.
As traders look to the news covering whether or not EDS will become part of H-P, traders were looking at how to get in the news. As a result, there are many other tech and IT-sourcing companies to look at that other potential players may take an interest in.
If we took the mid-point of the pricing at $12.5 Billion we would have a rough share price of $25.00 per share on EDS. At that rough price, you would have a company that analysts expect to be priced at 18.2 times DEC-2008 earnings and 0.55-times revenue estimates.
Read the full story of "Who Could Be Next" at 247WallSt.com to see which other stocks in IT-outsourcing stocks could be in play.
The almost never-ending Clear Channel Communications Inc. (NYSE: CCU) buyout may finally clear. Numerous reports talk about a settlement was reached this weekend between the banks and the buyers. The New York Times has a full report, while the WSJ also has data on its reporting too.
A year ago, Bain Capital and Thomas H. Lee Partners agreed to buy the largest U.S. radio broadcaster for $39.50 per share but the deal delayed after the six banks failed to provided promised financing. The New York trials between the banks and the buyers were set to begin this morning and the judge postponed the trial until Tuesday, largely thought to allow more time to complete a settlement. The new terms for the buyout reduced the price to $36.00 per share, according to someone familiar with the settlement. The six banks include Morgan Stanley, Citigroup, Deutsche, Credit Suisse, Royal Bank of Scotland, and Wachovia.
Clear Channel shares jumped on the news over 10% to $33.20. The 52-week range is $25.90 to $38.58.
Cumulus Media Inc. (NASDAQ: CMLS) has announced that the management-led investor group has terminated the planned merger agreement. While there was a glimmer of hope that this was going to be rekindled, the deal spread on this was so wide that a fleet of trucks could have driven between it.
Cumulus has agreed with the investor group led by Lew Dickey, its Chairman, President and CEO, and an affiliate of Merrill Lynch's (NYSE: MER) Global Private Equity, to terminate the merger agreement which first came on July 23, 2007. The members of the investor group informed Cumulus that after exploring possible alternatives they were unable to agree on terms on which they could proceed with the buyout.
As a result of the termination of the merger agreement, the investor group has agreed to promptly pay Cumulus a merger termination fee of $15 million. In addition, the terms of the previously announced amendment to Cumulus' existing credit agreement will not take effect. Cumulus had a market cap of $253.6 million based upon a $5.81 close on Friday.
The company has also announced that its board of directors intends to explore the possible implementation of a new stock repurchase plan in the near-term in order to provide liquidity opportunities to stockholders.
It appears that the world of porn is getting more attention from private equity and venture capital investors. And, no, it isn't that private equity executives and deal makers are spending more time looking at porn than they are negotiating deals. (Well, maybe.) More importantly, a big investor in the space has won an award and may be opening a floodgate of capital
AdultVest is a private equity venture that we covered on its launch earlier this year. The company concentrates exclusively on adult industry investments, mergers and acquisitions. So far, its initial numbers are pretty stellar.
It claims to have some $7.9 billion in "available capital" to invest in adult themed businesses, and $286 million of that was raised "within the last 7 days." It also claims to have 3,809 registered investors, with 53 of those signing up in the last week. (This data is from the group's homepage.)
The big news is that AdultVest was just selected by Alternative Investment News as one of four funds nominated for the "Hedge Fund Launch of the Year" award. And last month, the company announced it was acquiring iPorn.com.
There are a number of reasons that the investment community is trying to get into and make money from porn. The most obvious one is that you are reading about it right here right now.
Some companies get it, some don't. Circuit City Stores, Inc. (NYSE: CC) has been in the camp of companies that don't get it. That may have finally changed today.
The company appears to have finally capitulated and realized its days under its own efforts may be limited. There are two separate announcements this morning, but in reality it is all part of the same issue.
This will allow the company to deal with the activist pressure, and may ultimately lead to the company either being run by a better team or become a subsidiary of another company. The company just issued a release that it has reached an agreement with Wattles Capital Management.
An interesting fund raise just closed today in the global energy sector. Lime Rock is a private equity firm that focuses on the global energy sector, and it announced today the closing of its fifth Lime Rock Partners fund, Lime Rock Partners V, L.P., with a total $1.4 billion in investor capital commitments.
Lime Rock has four predecessor Lime Rock Partners funds, and Lime Rock Partners V will make what it calls "creative, value-adding, and long-term growth capital investments" in companies in the global energy industry.
This notes that some 78 institutional investors participated in the fund, including leading endowments, foundations, and pension funds, made capital commitments to Lime Rock Partners V. It also says that it did not actively market this fund, as some 91% of capital commitments came from its existing investors.
Lime Rock Partners funds have invested $1.0 billion in 47 energy portfolio companies worldwide, which are primarily in the exploration & production, energy services, and oil service technology sectors. These funds have also realized some $1.7 billion and "continue to hold significant unrealized value in their portfolio company investments."
Lime Rock also manages Lime Rock Resources, a $450 million fund, which directly acquires and operates oil and gas properties in the United States. Lime Rock manages $3.5 billion of private capital for investment in the energy industry.
The exchange will be valued at approximately $496 million and consists of a tax-free exchange of 12.7 million GE shares held by Rainbow and given to General Electric and cash given to CBS and Redford entities for their interests.
Sundance began in 1996 under the direction of Robert Redford, with the goal of creating a channel that brings dedicated viewers while promoting artistic freedom of expression through various films, series, and documentaries. It now reaches some 30 million subscribers and with the acquisition, Sundance will join Rainbow's portfolio of channels, including AMC, IFC and WE.
Jon Ogg produces and edits the Special Situation newsletter for 247WallSt.com.
PurePlay has announced the closing of Series C equity financing round for $15 million. The company claims to be the first and the largest online, legal non-gambling poker site with a record 1 million users and to-date has given away $3 million in cash prizes. The funding will allow PurePlay to increase marketing and expand infrastructure to handle the rapid growth.
Investors include Bay Partners, Ron Conway, James Joaquin, and other Silicon Valley investors. Ron Conway formerly headed Angel Investors LP and is currently an independent angel investor. He wrote "The Godfather of Silicon Valley" and, notably, he sits on the boards for Facebook, Plaxo, Anchor Intelligence, Associated Content and Zappos. He was also an initial investor in Google. James Joaquin funded When.com, presided over OFoto and Xoom and acts as a venture partner at Bridgescale Partners.
Maybe this company doesn't even need the potential regulatory loosening up that has been proposed by Barney Frank.
GodTube has reportedly received a $30 million investment from hedge fund GLG Partners, according to PaidContent. The news came on Sunday, unsurprisingly.
GodTube is a quickly growing Christian online video sharing and social networking website and previously received $2.5 million in funding, some from private investor Norm Miller of Interstate Batteries.
The site now has 2 million users per month and was launched less than a year ago in Dallas. CEO Chris Wyatt formerly acted as an executive producer at CBS.
While $30 million sounds like a massive amount, the costs of broadband make it a normal investment for comparable video sharing sites. Recently, GLG invested in digital media companies Glam Media and Spinvox. This round of funding for GLG Partners is $150 million.
Also according to the article in PaidContent, GLG Partners and GodTube each declined comment on the rumored investment.
Today Silver Lake has announced the closing of the Silver Lake Sumeru fund for $1.1 billion in capital raised. Silver Lake is a leading private investor in technology and the fund represents its first middle-market investment fund. The fund will specifically focus on growth opportunities in sectors such as hardware, software, internet, and technology-oriented services that are in the midst of the transformation shift in performance or growth.
Silver Lake works with existing management to add value in investments and push growth opportunities. Here are some current deals it has been involved in:
In the end of 2007, Silver Lake Sumeru acquired a majority stake in Mobile Messenger and is providing capital and operating experience for mobile content management and distribution.
In April 2008, Silver Lake Sumeru financially supported the merger between AVI and SPL to create the world's largest video and audio conferencing provider.
Also open to divisional spin-offs, Silver Lake Sumeru recently signed a definitive agreement with ChoicePoint (NYSE: CPS) to acquire their i2 division which is ChoicePoint's investigative analysis and visualizations software division.
Last year, Silver Lake closed its Silver Lake Partners III, a fund that focused on large-scale investments in technology companies for a total of $9.3 billion in equity commitments. Combining this fund with Sumeru, Silver Lake has $10.4 billion directed toward technology investments. Silver Lake now manages a total of $16 billion in assets.
We recently noted the woes of private equity and capital intensive needs of many technology, particularly with Freescale. Some companies flat out just need to be public, but there are always opportunities around.
The Blackstone Group L P (NYSE:BX) has announced the closing of three newly created collateralized loan obligation funds totaling $1.3 billion. Those CLO's are trading again. These were all created over the past month, and these are just the CLO's that Blackstone participated in.
In March, Blackstone merged its existing CLO group with the team from its newly acquired GSO Capital Partners. This 35 person CLO team has offices in New York and London. The combined CLO group now manages $14 billion across 26 funds in the US and Europe.
This shows a breakdown in the actual amount per CLO, compares it to Q1 and to 2007, and it even puts the lower volume blame now on the lack of AAA rated part needed for each CLO.
Interestingly enough, Blackstone shares are up almost 50% from their post-IPO lows.
Israel Cleantech Ventures (ICV) has closed its capital raise at $75 million, according to Reuters. The original target for the fund focused on clean technology exceeded its target of $60 million and they had to turn away additional investors.
Specifically, the fund will focus on Israel based or related high growth clean technology companies in sectors such as alternative energy, water conservation and purification, emissions reduction, and technologies that allow businesses to operate more efficiently and more environmentally friendly. Funded in 2006, ICV closed its first round of funding, raising $15 million in January 2006. The Globes in Israel reported that this was above target as well.
Funds came from institutional investors as well as family funds in the U.S., Europe, and Israel, such as Robeco Private Equity, a Netherlands-based asset manager, and Piper Jaffray, a U.S. financial institution.
The fund has completed seven investments, including Aqwise (waste water treatment), CellEra (fuel cells), Citrine Renewable Energy (landfill biogas treatment), Emefcy (energy production from wastewater), Metrolight (energy efficient lighting), Project Better Place (electric vehicle infrastructure), and Pythagoras Solar (solar energy).
Jon Ogg is an editor and producer for the Special Situation newsletter for 247WallSt.com.
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